Here's a story for you underdog fans. Infinium Labs, a virtually unknown, venture-capital-funded company, almost stepped in the ring with juggernauts Microsoft, Sony and Nintendo with a video game system it had developed. The company claimed that its Phantom was a "console in a class of its own" and promised that the Phantom would offer "gamers a more exciting and compelling gaming experience than any other game console or PC on the market."

Was this just hype, or did the Phantom really have a chance at being the next big thing? In this article, we'll tell you what there is to know about the Phantom so you can draw your own conclusions.

Keep Reading Below

The Basic Idea

Concept shot of the back of the Phantom , showing video ports, network ports and standard USB ports.

Phantom is an always on broadband device, which allows gamers a wealth of options, from wireless connectivity to massive multiplayer capability... to allowing gamers to demo and experience games before purchasing or subscribing.

Sound familiar? That pretty much describes a desktop PC with a broadband connection. And at its heart, that's what the Phantom is: a Windows PC (this page lists the product specs).

Keep Reading Below

But the Phantom is different from an off-the-shelf PC in a few important ways. Namely:

It has built-in S-video, RCA, and component video ports, so it can hook up to your TV directly, just like an X-Box or DVD player.

It has built-in wireless modules, which work with a wireless keyboard, wireless mouse and wireless game controller

VPGN

The Phantom Network, Phantom's VPGN, is essentially a virtual private network designed exclusively for games. Like a standard VPN, it acts as a direct, private route from computer to computer, through the Internet -- in this case, from a Phantom console to the Infinium Labs game server (see How VPNs Work for more information). The VPGN makes it easy for the console to get specific games from Infinium Labs, and more importantly, it makes it easy for Infinium Labs to control who gets what games.

Even with these modifications, the Phantom isn't earth-shattering from a pure hardware technology standpoint. Infinium's major innovation is taking what's special about a gaming PC -- the wide variety of games, the ability to download games and game previews and the ability to easily upgrade the machinery -- with what's special about a console -- the ability to play games using a big-screen TV, high-end sound system and custom controller.

Keep Reading Below

And that in itself is an interesting idea. As we'll see in the next section, Infinium Labs has used this marriage of console and PC to put together a plan for a creative new gaming business.

The Business

As we saw in the last section, the Phantom does not have a CD-ROM drive like a standard PC or game console, and it doesn't have normal access to the Internet either -- it works through a specialized VPN. In other words, the only way to get a game into the machine is to download it directly from Infinium Labs over a broadband connection. This and the system's propriety data encryption are the essential pieces of Infinium Labs' business model.

To understand the program, let's say you decide to get a Phantom. Here's what you could expect:

Keep Reading Below

You would have to already have a broadband connection in your home, either through a DSL or Cable Internet service provider (ISP).

You would order the Phantom console online or buy it in a store. Infinium has announced they will give the console hardware away free to people who sign a two-year contract for access to the Phantom VPGN.

You would hook the console up to your broadband connection.

Infinium Labs would set up an account for you and give you access to the VPGN. You would pay $29.95 a month for the VPGN access.

When you set up the console, you get a library of "free" games. Infinium Labs has not announced what these games will be, but says they will "appeal to a wide variety of users and gaming needs."

To buy more games, you would access the VPGN and see what's available for download. These games would be PC-based games and possible ports of games for X-Box and other consoles. Using the VPGN service, you would also be able to preview games, rent games, enter tournaments. When you bought a game, you would download it to the Phantom's hard drive. The Infinium Lab system would keep track of what you owe.

You would also have the ability to block certain types of games, to keep children from playing games with excessive violence or other adult content.

You would get access to instant messaging, audio and video conferencing, forums and news. Infinium hopes to also offer Web browsing, using Mozilla instead of Internet Explorer.

Infinium Labs' hope is this program offers enough to gamers and game developers to be a success.

Enticing Gamers

Here are the principal potential advantages to the Phantom, from a gamer's perspective:

Better selection: A major game retailer, such as Electronics Boutique, is only going to carry a couple hundred games for a particular console or for Windows PC. The store just doesn't have room to put any more on the shelves. And because it's expensive to print discs, package discs and ship discs to physical stores, only relatively large game companies can afford to get a lot of games to stores anyway. There are a lot of game developers out there who could produce thousands of games for a particular console or a PC, if they could get past the distribution hurdle. When you take the physical disc out of the picture (because the gamer downloads the game), there is no competition for shelf space, so it's easy to expand selection. PC owners enjoy these same advantages -- they can download games they might not find anywhere else.

Lower price: Again, because you're taking manufacturing and distribution costs out of the picture, you cut down significantly on the game distributor's expenses. This means, potentially, Phantom games could cost less than comparable X-Box, GameCube or PlayStation 2 games.

According to Infinium Labs, you would have thousands of games to choose from, ranging in price from $2.99 to $50.

Keep Reading Below

Preview capability: Using the VPGN set-up, Infinium labs could let gamers try out games on a trial basis or rent games, before the gamer would have to buy. This isn't anything new either -- you can download trial PC games from the Internet, and you can rent console games at a video store. The main perk is convenience: Phantom would let you do it without searching the Internet or going to the store.

Enticing Business Partners

Here are Phantom's main advantages to game developers:

Low risk publishing: With the Phantom set-up, game developers can offer a game to console gamers without shelling out the cash to actually put discs on store shelves. If the developer has already created the game, they basically have nothing to lose offering it to Phantom owners.

So what's the downside? We'll get into that in the next section.

Keep Reading Below

The Man with the Plan

So who's behind the Phantom? The company CEO is Tim Roberts, an entrepreneur who retired at 28 when his company SAVVIS made its initial public stock offering in 2000. And what does SAVVIS do? Its main business is providing network services, such as secure virtual private networks, to major businesses.

Problems

Infinium Labs has an interesting product, but it also has some huge obstacles in its way. The main hurdle for gamers is probably price. Once you buy an Xbox, PlayStation 3, Wii or PC, you can operate it for free forever. With the Phantom, you would have to pay a monthly fee. Monthly fees are the norm for cable television and Internet service, but it's a hard sell for the game world. Every gamer is used to paying for a console once and only once. If you were to stop paying the monthly fee, the Phantom would cut you off from the only way to access new games.

The other issue is competition with normal PCs. A new desktop PC with the right peripherals can do most of the stuff the Phantom does (it doesn't have access to Infinium's game database, but it does have access to other games online), and you can also use it to surf the Internet with Explorer, keep track of your finances, create art, mix and burn CDs, write and print letters, etc.. The Phantom is a specialized PC in some ways -- it's designed to hook up easily to your entertainment system -- but in other ways, it's a handicapped PC. And that's sure to raise some eyebrows with PC gamers -- why pay for a PC when it doesn't do everything a PC should do?

Keep Reading Below

The Best Shot

If it works, Phantom most likely will appeal to two very different groups. Many serious gamers will probably go for it, just because they want access to whatever games are out there (this is the chunk of the population who has nearly every console ever released).

The other major group would be families. The phantom has inherent appeal to parents who don't want to shell out $50 for every single game their kids want, but also don't want their kids downloading inappropriate games on the Internet. They would set the parental controls on their account, give their kids a monthly gaming allowance, and forget about it. The kids are happy, the parents are happy, and the cost goes straight into the family budget.

Keep Reading Below

That's the idea anyway. The real story will be what happens when the console hits the streets. Infinium has announced a tentative launch date of November 18th, 2004.

Check out the next page for a rundown of the Phantom's specs, or click here to learn more about the new console.